The SchifferLine
Timely Real Estate News…………………….15 February 2021
***********************************************************
Save the Date
On Wed the 10th of March at 7:00 pm I will be hosting a Zoom call forum from an expert in Homeowners Insurance. If you wish to join us and send me your email address so I can send you the link. There are still a great number of people who are being told their insurance is being cancelled. He can help. Please send your information to… ceschiffer@gmail.com.
***********************************************************
2021 starts off with mixed results
As we ended 2020, we were seeing a comeback in sales volume (down to 4% from 2019), and sales prices continued their steady climb upward, with four of the five communities I report on averaging a 4% increase in median sales prices over 2019. But in January — entering our11th month of this global pandemic — we are seeing mixed results in volume and pricing as some areas are strongly up, others down.
Sales volume for January for the five communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood — was $202 million vs. $305 million, down 33%. Each of these communities were down, with BHPO off $43 million in sales volume, Brentwood was off by $26 million, Bel-Air/HH down $20 million, Westwood/CC was down $14 million, and Beverly Hills was only off $8 million in sales volume compared to January 2020. It is a bit surprising as the stock market was zooming upward after the start of the year, but we will no doubt hear more after the first quarter reports.
Malibu, an area I also cover, was up 147% with sales of $47 million vs. $19 million for January 2021.
In January Beverly Hills had three sales over $10 million; BHPO had one sale of $17 million; Brentwood had one sale for $10 million Bel-Air/HH had three sales of $4 million; and Westwood/CC highest sale was $7 million. Please remember the majority of these numbers for sales reflect transactions that have closed escrow thus actually the sale itself took place last year.
Sales volume has started off slow, but as I have seen in so many years in tracking sales on the Westside, sales always get better, and we will see larger volumes as the economy perks up with lifting of economic restrictions due to more of us getting vaccinated. Let’s hope so!
***********************************************************
Median sales prices are scrambled too
We had two winners for January — Beverly Hills Post Office was up 47%, with a new median sales price of $3.397 million, and Bel-Air/Holmby Hills was 20% ahead of last year at this time with a median sales price of $2.100 million, and Malibu was ahead of 2020 with a median sales price of $2.142 million, an increase of 7%.
High-end sales had a record year (homes selling for $5 million-plus) on the Westside, but Beverly Hills was off 7% from its previous high at $5.212 million for January…Brentwood was down 11% at $3.627 million and Westwood/Century City was down 3% at $2.520 million.
For the most part, sales prices are sticking close to the original selling price — in the mid-90%, with only Beverly Hills Post Office considerably off at 79% of the original listing price.
It goes without saying how our communities are valued and respected around the world today. 2021 is projected by our experts and economists to be a solid year for real estate. I share their optimism.
***********************************************************
Sales activity remains strong
If you recall in the last Schiffer Line I talked about a house in the Rancho Park area that had just come on the market and on the first day, they had 19 showings! They ended up with 40 offers, issued counter offers to 9 potential buyers and after 2 weeks of negotiation just opened escrow this past week. The original listing was $1,595,000 and the final price was just under $2,000,000.
I know that sometimes sellers take the philosophy to underprice their listing to generate this kind of activity, which is not a philosophy I generally take, and I can assure that is not what this particular seller had in mind. It simply is just a case of a strong property, positioned well, including being properly prices for the comps in the area and ALOT of buyers out there wanting to take advantage of the market and interest rates.
U.S. home prices accelerating in housing boom
A report from the National Association of Realtors show that we are in the strongest housing boom in more than a decade, boosting home values from major metro areas to small cities and vacation spots.
The median sales price for existing homes in each of more than 180 metro areas tracked by the NAR rose in the fourth quarter from a year earlier.
That is the second consecutive quarter that every metro area tracked by NAR posted an annual price increase, marking the first time this milestone has been achieved in back-to-back quarters.
T
he latest data underscores how the home-price rally, which over the years has played out in distinct pockets such as Idaho or across parts of the Sun Belt, has become much more widespread and continues to gain momentum. In the fourth quarter, 161 metro areas posted double-digit-percentage price increases, up from 115 metro areas with double-digit gains in the third quarter.
Demand for homes has surged in the past year as buyers took advantage of record-low interest rates and the pandemic prompted many households to seek bigger houses that could better accommodate remote work. Home sales in 2020 rose 5.6% to the highest pace since 2006. Simply put, the NAR said this is a “Race for Space”!!
***********************************************************
Federal Reserve will continue to support U.S. economy
Fed Chairman Jerome Powell indicated last week the Federal Reserve will continue supporting the U.S. economy 
through low interest rates and hefty asset purchases, stressing the labor market remains stunted by the pandemic.
Powell reiterated his view that “a patiently accommodative monetary-policy stance” will be an important factor in returning the economy to a healthy state in which workers—particularly low-income ones—can find jobs. That means the Fed is likely to refrain from raising interest rates or reducing the pace of its bond purchases for the foreseeable future.
The Fed chief also repeated his call for more fiscal support for the economy, saying that monetary policy alone won’t be enough to restore the labor market to full strength. “It will require a society-wide commitment, with contributions from across government and the private sector,” Powell stated.
The Fed took extraordinary steps last year to stabilize markets and support the economy by pushing short-term interest rates to near zero, launching an array of emergency lending programs and making large-scale purchases of Treasury securities and mortgage bonds. Since June, it has bought at least $120 billion a month, net of redemptions.
***********************************************************
Spouses take money seriously, especially on dates
Money can be a hot topic for couples. A 2020 poll by Personal Capital revealed that 53% of respondents found talking money with their significant other stressful. The same poll found that 35% of respondents have kept secrets about financial decisions to avoid conflict. The poll also discovered that budgeting for ‘couple events’ — like a date night, can be potentially troublesome — and they recommend developing a budgeting strategy to make each other happy!
Here are some simple ideas you might follow— 1) Make a Date Night First — you need a plan, so pick a date in the future that is ‘free’ where both partners are not frazzled with heavy work day loads.…2) Consider each other’s feelings and experiences — Since money can sometimes be an issue, pick a ‘date’ that isn’t going to create a hassle by causing the other to feel uncomfortable…like a movie and dinner afterward, or a dinner at your spouse’s favorite restaurant. In their opinion it is truly is not how much you spend but how you spend it. 3) You don’t have to it all in one date — You can spread it out. Their best advice is to ’talk’ about dating and find out what ’they want to do’ — perhaps you can plan a weekend program — half on a Saturday, the rest on Sunday…. visiting a museum one day, picnic in the park the other…be creative. 4) Make it a priority — If you bring up the date night concept, be prepared to follow through. Don’t believe the other spouse hasn’t already put this into their memory bank — the worst you can do is not following up. And 5) Take action — be creative with your budgeting — think outside the ‘date box’ and perhaps go back in time when life was simpler, and yes, less expensive. The key experts have concluded that dating in a marriage or long-term relationship is about having fun — for both parties. During these pandemic times, we have less choices and money can be a challenge, too. Talk, work it out, and have fun!
***********************************************************
Millennials changing luxury real estate market
It was bound to happen: Tech-savvy and environmentally conscious, millennials’ preferences are poised to dramatically reshape the high-end housing market. In sharp contrast to the “slacker” stereotype that has defined their generation, millennials aren’t living in parents’ basements. They’re buying multimillion-dollar homes.
At 38%, millennials—adults born from 1981 to 1996—represent the largest share of home buyers in the U.S., according to a survey by the National Association of Realtors. According to the NAR survey, it is not uncommon for millennials, who would normally be focusing on starter homes in lower-priced markets, are now jumping into multi-million homes in high-priced markets.
Millennials are the most educated generation in history, have higher earnings, and are set to inherit more than any prior generation, according to a May 2020 report by the Brookings Institute.
Characterized by their tech savvy and environmentally conscious values, millennial preferences are poised to dramatically shape the market, a dynamic that has been on display during the Covid-19 pandemic.
Beginning almost immediately after the coronavirus hit, for instance, buyers began to flock to areas that offered walkability, nature, and a well-rounded quality of life — think Aspen, Austin, Montecito. I am seeing this on the Westside, especially for those millennials in the entertainment and tech industries who are attracted to what we offer in our communities.
***********************************************************
Home equity is on rise in the West
Housing appreciation has grown over the last few months with the surging real estate market. 30%—nearly one in three—of homes with a mortgage in the U.S. are now considered “equity-rich,” according to a new report from ATTOM Data Solutions, a real estate research firm.
A home being equity-rich means that the combined estimated amount of loans secured by the property is 50% or less of the estimated market value. In short, it means homeowners themselves have accumulated at least half of the equity in their homes. This is one of the primary reasons when buyers say they “are waiting for the market to collapse” are wrong. Because there is so much equity in a number of homes, and this includes condos and townhouses, owners are not likely to walk away from that equity and allow their properties to go into foreclosure. For the most part, they will sell their properties instead.
Leading the percentage of those homes that are in that category is California, which grew 46.1% in the fourth quarter, compared to 39% in the third quarter. Of the top 10 Zip codes in the U.S. that have the most equity-rich homes, seven are located in California — Oxnard, Inglewood (2 zip codes), Glendale, Carpinteria, Bloomington, and Santa Maria.
***********************************************************
Do you know the history of the closet?
Closets have been around since Egyptian times when pharaohs built huge pyramids and buried all their ‘stuff’ to serve
them in the next life. But it wasn’t really until the industrial revolution when homes required storage space or built-in closets, and we soon food and beverages were stored in a separate place — called pantries.
To appeal to wealthy residents, the first closets in the U.S. were introduced at the Dakota apartments in New York in
the late 1800s, which featured closets 2.5 ft deep and 6 ft. wide. But as their utility and benefits became wider known, closets became standard in the housing boom following WW2. Fast becoming entrenched in housing plans, closets took on new meaning — walk-in closets, sectionalized for shoes, apparel, accessories. Companies were formed to create or re-do closets. Architects became more sensitive to ’stuff’.
Armoires, walk-ins, built-ins and storage systems — there are a myriad of ways we store our stuff today. But closets have achieved new status — what sets them apart and how their design and purpose have evolved brings new meaning to storage. Buyers today put more emphasis on closet spaces and how they are designed, because we all are now spending more time at home.
Today, we see built-in storage walls, also called storage “systems’ that can consume an entire bedroom-area space. Entire walls, from floor to ceiling can be outfitted with systems of doors and drawers.
***********************************************************
This & That
First of all, I apologize for my lack of sensitivity in honoring the Lunar New Year. I hope I did not offend anyone by referring to the celebration as Chinese New Year, when in fact it is a holiday that is celebrating universally by all Asian nationalities. ENJOY!
For the past number of years, I have served as the Liaison between the Greater Los Angeles Foundation and our parent company in New Jersey. Effective as of this week, I have the extreme honor of having been asked to be the Liaison for the newly formed Foundation for the entire Southern California Region which encompasses 78 offices and approximately 4000 agents. This will enable me to interface with more the Coldwell Banker agents though out Orange, San Diego, Riverside Counties as well as the Desert Region and be able to further market my listings as well as find properties for my clients that are interested in purchasing or selling property int those areas.
As we discussed, listing inventory is quite low, and properties that are properly presented which means, well priced, shown in good condition and for the most part staged effectively are selling very quickly. I am looking forward to working with you in representing your property to assist you in achieving your goals to move. Please let me know how I 
can assist you in that regard.
I hope you are successful in making those arrangements for your vaccine. I am in my quest to obtain my appointment for my second one.
In the meantime, enjoy our beautiful weather and stay safe and wear those double masks. Hopefully, we are coming down to the home stretch, let’s not blow it and be careless.
***********************************************************
Happy Valentine’s Day
“Home sales rose in December, and for 2020 as a whole, we saw sales perform at their highest levels since 2006, despite the pandemic,” said Lawrence Yun, NAR’s chief economist. “What’s even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market.”
A new report from CoreLogic shows that national single-family rental prices increased 3.7% year over year in November and are now above the levels before the COVID-19 pandemic started.
There is a house for sale in the Rancho Park area of West Los Angeles that is on the market for approximately $3,000,000 and earlier in the week we had 19 showings! It is going to be interesting to see where the final sales price ends up. The price point between $1,500,000 and $3,500,000 is ON FIRE RIGHT NOW! Who are these buyers? Generally, they are first time buyers taking advantage of the interest rates and the fact that we are seeing the “possible light at the end of the tunnel” as far as COVID-19 is concerned. Come join the party!
There were 725 closed sales of $5 million-plus in 2020, versus 560 in 2019, up 30%. Of these, 219 were $10 million-plus versus 162 in 2019, up 35% Sixty-one (61) of these were $20 million-plus versus 43 in 2019, up 42%.
“There is robust home price appreciation and that builds wealth for those who own a home,” stated Laurie Goodman, vice president at the Urban Institute. However, a shortage of homes for sale is prompting home prices to rise fast and that is shutting out many buyers. The national median existing-home price in December was $309,800, up nearly 13% compared to a year earlier according to the National Association of Realtors.
Finally got my first vaccine the other day, and I must tell you that getting that appointment was an exercise in frustration. Those of you who are in the approved categories know what I am referring to. After searching online for a bit to find an appointment, you begin the registration process only to have it all go away while you are in the process of registering and then finding another opening, securing the appointment, and then having it cancelled because they have run out of product. So far, so good no problems.. Hope it stays that way, and soon everyone will be able to their vaccines.
Food offerings are a prayer or a wish and can be addressed to ancestors and other beings such as the Jade Emperor and The Kitchen God. The offering of food serves to bring ancestors and other beings in the other world closer to oneself. There are many foods to be eaten during the celebration, including long life noodles. Here are some facts about some of the symbolic foods:
Also, lately I have been doing a few videos that you can find on my YouTube channel. Caroleschiffer@youtube.com.. They are on a number of different subjects including getting emotionally qualified to either buy or sell a house!
What this means is that many homebuyers will be facing a hot, competitive market, especially during the typically active selling period starting in Spring and ending in the Fall. Although we didn’t really see a slowdown in sales this last Fall, CB anticipates that the lack of inventory will surely frustrate buyers.
For the five communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood, the average increase in median sales prices at year’s end was 4% compared to a year ago, December 2019. Median sales prices increased 4% for four of these communities for the year — over 2019 year-end prices. Beverly Hills Post Office, however, posted a gain of 11%, ending with $3.150 million median sales price. Beverly Hills ended up 4% at $5.475 million, Bel-Air/Holmby Hills ended up at $2.350 million, Westwood/Century City was at $2.362 million for 2020, and Brentwood was up 4% at $3.3225 million. Venice — a community which I serve as well — had $2.015 median sales price, which recorded no change from 2019 year-end #s.
Total sales for 2020 for these five communities was $3.906 billion, only 4% behind 2019 year-end’s total, which was $4.095 billion. At the end of November, we were down 5%. There were the normal ups and downs in terms of sales volume in each of these markets — The big contributor to sales volume’s increase was Beverly Hills Post Office which had a net increase of $225 million in total sales compared to 2019.
The Pending Home Sales Index is a forward-looking indicator of home sales based on contract signings, fell 2.6% to 125.7 in November, the third straight month of decline. Year-over-year, contract signings climbed 16.4%. An index of 100 is equal to the level of contract activity in 2001.
these, 205 were $10 million-plus this year and there were 162 $10 million-plus sales at this time last year, up 27%.
Fannie Mae’s new rules, which took effect December 7, 2020, says the government-sponsored enterprise would no longer back loans in high-rent vacation spots. Freddie Mac echoed that decision, with similar rules to take effect in February.
My lender, Simon Atik at Guaranteed Rate Affinity, tells me that he has a few 12- and 24-month bank statement deposit loans which doesn’t require tax returns.
The Covid-19 pandemic and ensuing economic fallout pushed millions of American to the brink as they relied on unemployment benefits, credit cards, and savings to stay afloat. Now that 2020 is behind us, researchers are starting to provide more complete analyses of how renters and homeowners navigated a volatile economic landscape.
One of the easy ways we can do this is to increase the distance from our homes and all plant material. It has been suggested that we take this from two (2) feet to five (5) feet. I know this sounds excessive and for me would have me remove some trees, etc. which frankly I am not prepared to do. But we can and should keep all of our plant material trimmed and possibly change some of the plants we have that are more flammable than others.
It is that time of year for us to celebrate…even in these pandemic times, we need to count our blessings and cherish our family and friends. With so many holiday traditions going virtual, this is all so new for us. There are fun things we can do…having a Zoom Holiday party is probably on your list. How about a contest on facetime or zoom where you dress up as your favorite holiday song, and everyone has to guess what/who you are, I know what I will be dressed up as, what about you? Our Thanksgiving Zoom call was so successful, we are doing it again, and are opening our presents together! However you celebrate the holidays I just want to wish you all the very best for the New Year!
“The ’20s will be roaring, but with several months of hardship first,” according to the quarterly UCLA Anderson Forecast. “These next few months will be dire, with rising COVID infections, continued social distancing, and the expiration of social assistance programs.
Even if the state builds more homes, commercial construction is unlikely to revive soon. If the higher rates of working-from-home and online shopping persist to a moderate extent after the pandemic is over, we’ll be over-supplied on office and retail space.
The big winner in sales volume increases was Beverly Hills Post Office, which gained some $230 million compared to the first 10 months in 2019, but the other areas were behind with Bel-Air/Holmby Hills off by $249 million and Beverly Hills down $120 million for the year in sales volume. In the last week or so, a number of mega sales of over $60,000,000 have been reported in both the Beverly Hills Post Office and Bel Air. These sales will be reflected in my Annual Report which I will be sending out after the first of the year.
Home median sales prices have moderated somewhat — Beverly Hills is up 4% through the first 11 months at $6.475 million; BHPO is also up 4% at $2.950 million. Bel-Air/Holmby Hills moved up 3% to $2.230 million, Westwood/Century City was up 7% at $2.360 million, and Brentwood was even for the past 10 months at $3.233 million.
Fifty (50) of these were $20 million-plus this year, and there were 41 closed sales of $20 million-plus at this time last year (up 22%). We are even in the $30 million-plus sales, with 16 for both years. We have had seven (7) $40 million-plus sales this year, and there were eight (8) at this time last year. And there are 70 pending sales of $5 million-plus at the moment, 16 of these are over $10 million.
As median sales prices continue their upward climb, home buyers are taking on bigger mortgages as they compete in a fierce housing market and face higher home prices. The average home purchase loan amount reached $375,000 last week, according to the Mortgage Bankers Association. That represents the highest average home mortgage since the MBA began the survey in 1990.
Many homeowners have updated or improved their homes during the pandemic. Major remodeling
Looked in your pantry lately? Would you say that your pantry is deluxe? According to a recent study the walk-in pantry has emerged as one of the most desirable kitchen feature for home buyers.
Unlike other virtual meetings, only the City and Berggruen panel members could be seen, and written questions were not visible. Attendees had no clue if questions were being skipped or paraphrased. A question about the entrance on Sepulveda was eventually read but the city did not have a drawing or an idea of what the design will be. No comment from the Berggruen panel on that question. There were a lot of comments suggesting that it be built elsewhere, but the city planning members responded that they are only reviewing the request as submitted. Zoning variances come up a lot. Brush fires, wildlife, noise, and traffic comments as well.
As I have reported earlier, despite being in an extreme, pandemic environment, the housing market is showing growing strength as we near the end of 2020. The median price for the U.S. market in October came in at $313,000, for the 104th straight month of year-over-year price gains. We have not seen this growth pace since 2006. Existing home sales rose for the fifth consecutive month to an annual rate of 6.85 million units — and that is up 4.3% from September, and sales were 26.6% higher than we saw a year ago.
With three firms already announcing results of a Covid-19 vaccine that is 90% to 94.5% effective, this has spurred tremendous optimism across the real estate landscape. While the actual timing of the vaccines availability depends on a myriad different logistics, the news gives hope for a future not dominated by COVID-19, especially at a time when numbers are spiking in states and cities — especially in Los Angeles County where new restrictions are being issued.
Depending on one’s situation, homeowners are now seriously considering swimming pools and large outdoor kitchens, something that was not on their pre-pandemic wish list. They are re-imagining their entire outdoor environment, creating designed gardens, fountain areas, and combining all of their favorite elements.
In most of the country, the 2021 maximum conforming loan limit for single-family properties will be $548,250. That marks a 7.4% increase from last year’s limit of $510,400. The FHFA’s loan limits define the maximum amount that Fannie and Freddie can finance for a one-unit single-family home.
Whether you live in the ‘flatlands’ or on a hillside or in a canyon, water can cause significant damage to our homes. On the flatlands, water can gather on your roof or in your yard, which if not monitored, can result in costly repairs to your roof and interior. On the hillsides or in the canyons, homeowners need to be vigilant from storm run-off that come cascading down the ground above you, and even intrude on your home from adjacent properties. The tragedy occurring in Montecito mudslides two years ago where 23 lives were lost, and 130 homes destroyed is a terrible reminder of what could happen. 
As aforementioned, we have a shortage of inventory, and one of the results of that is multiple offers, however, when some buyers are “taking the holiday’s off”, there is less competition for that home you are longing to own, and also with people both decorating their homes for the holidays and also staying home, you can see how they live in the house, and get ideas as to how you can live there. Also, with the coming of a vaccine, the market will most likely open and the interest rates will increase some.
One of the things I love about working with Coldwell Banker, is its need and philosophy of giving back. 
As I have mentioned from time to time, there is a proposal for the construction of the Berggruen Institute on the last 447 undeveloped acres om the area adjacent to Mountaingate. There is a lot of community opposition to this project, and have a law suit has been filed against the project by the Master Association of Mountaingate (MOSA). They won the first round in the court, but the legal battles are just beginning. There is a virtual public hearing on the proposed EIR study to be done between the dates of Nov 20 and the 21st of December scheduled for the 8th of December at 5:30 pm. I invite you to participate in this hearing by logging on http://www.joinwebinar.com/ and entering webinar ID 772-772-955 and your email address.
It will be vastly different celebrating the holidays this year, be it Chanukah, Christmas or Kwanzaa but even with all of the losses we have sustained this year, I for one am grateful for my family, friends, colleagues, and clients and the support and love we share. For Thanksgiving with Covid prohibiting my family and I getting together for the holiday, we had a Zoom call with participants in Vancouver, BC, Montreal, Alaska, Orange County in California, and myself in my house in Bel Air Crest. It was great fun, we even played a game and decided to do this every week or two and have plans for our next holiday celebration as well.
You must be logged in to post a comment.